Projects-to-Products: What is a Product?

In speaking with customers attempting to make the projects-to-products transition, I'm often reminded of the early days of the expansion of PPM. We would often run into customers asking the key question: "What IS a project (for our organization)?" They say history repeats itself; lots of customers are now asking "well, what is a product for us?"

It's not always asked with intent, either. Some practitioners ask the question out of confusion as they don't see their organizations delivering traditional "products". A major government organization expressed concern that "we don't really have products". We then proceeded to have the following conversation:

ME: "Well, what do you fund?"

CUSTOMER: "Oh, we fund capabilities."

ME: "Do you also have capabilities managers that are responsibility for the capability and its budget?"

CUSTOMER: "Yes, we do."

ME: "Sounds like that's a good start for the product discussion."

We'll cover the lack of definitive terminology in a later blog entry, but suffice to say that the "product" concept is just that: a concept that could carry different names as organizations (or even parts of the organization) need.

With that said, it would probably be useful for us to agree on a common set of characteristics for a product. As a reminder, here are the PMBOK standard characteristics for a project:

Set of related activities

Definite beginning & end

Creates a unique product, service, or result

Receives explicit funding in the form of money and/or people

Based on our research among literally hundreds of customers, we would propose the following characteristics for a product (or product-like substance):

A sustained asset

With an indeterminate life (e.g. uncertain end date)

Delivers value that can be articulated in reasonable business terms (like outcomes)

Receives recurring explicit funding in the form of money and/or people

This set of items appears to encompass the primary points that define a product-type investment and would benefit from "product management" techniques, but it's just a proposal. What do you think? Do you like this model? Is it helpful? What questions come to mind? Are there characteristics that we missed? Would you word things differently? Hop into the comments and let us know.